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If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then :

a.only variable costs are relevant. 

b.fixed costs are not relevant. 

c.the order will likely be accepted. 

d.the order will likely be rejected.

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Question ajoutée par Zaid Mahadin
Date de publication: 2015/03/25
IMRAN ALI MOHAMMED
par IMRAN ALI MOHAMMED , Accounts Officer , M/s. Euro Glazing Ltd

If the Plant is operating at full capacity, it is more likely that the Order will be rejected. 

fadil hoory
par fadil hoory , محاسب , شركة مقاولات بالسعودية

  I did not understand your question, but I think by Mavhmt answer (c) the nearest

Youssef Talaat CMA
par Youssef Talaat CMA , accountant , Galaxy industrial equipment trading L.L.C

d.the order will likely be rejected 

since the plant is operating at full capacity  

Khalil Jeries Al Wahhab  CPA
par Khalil Jeries Al Wahhab CPA , Group Manager Internal Audit , El Seif for Operations and Maintenance

The case new order to be accepted then more space to be rented / built. New machines to be purchased. More utilities expenses to be incurred and more workers are needed. Then both fixed and variable costs are affected. Because selling price would be less than the usual then profit from the offer would be less than the usual. Therefor answer d is more likely.

Mir Mujtaba Ali
par Mir Mujtaba Ali , Internal Audit Manager , Confidential

d. the order will likely be rejected <<<<<<<<<>>>>>>>>>>>>>

Utilisateur supprimé
par Utilisateur supprimé

d.the order will likely be rejected.

Mark Angelo Damuag
par Mark Angelo Damuag , Financial Analyst , Evacare Management Consultancy Inc

Since the plant is operating at full capacity, an special order (one-time) would mean additional  fixed equipment and thus would mean higher expense, therefore, the answer would be d.the order will likely be rejected.

Anas  Dawah
par Anas Dawah , Senior Internal Auditor , Talal Abu-Ghazaleh Global (TAGI)

A- only Variable Costs relevant 

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